American Oil and Gas Reporter - October 2024 - 72

SpecialReport: Panhandle-Hugoton Activity
Questa Energy Corp.'s focus is on rich gas produced from the dolomite in the West Panhandle
Field of Texas, which earns a premium price at the wellhead.
gas production of 1,500-1,600 Btu, relates
President Tyler Rufenacht.
The company produces about 150
wells in the Texas and Oklahoma Panhandles,
but dolomite production in the
Panhandle, West Field of Texas is Questa's
bread-and-butter, he says.
Other properties in the Panhandle, East
Field, which has similar geology but different
field rules, produce more than 1,800
Btu gas in some areas that sells for more
than $9/Mcf at the wellhead.
Decades ago, reservoir pressures on
these shallow vertical wells were around
450 psia, but that has declined to less
than 30 psia today, Rufenacht explains.
With so much of the production under
vacuum, wellhead compression is required.
One Questa property includes five or six
wells interconnected with poly pipe and
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onnection to
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tied to a compressor. Revenue from attractive
pricing makes the investment
well worth it, he says.
Like other small Panhandle production
companies, Questa seeks niche locations
with production and redrill potential for
wells typically completed open hole. Subsequent
treatment with nitrogen and acid
helps maintain production at a decline
rate of less than 5% annually on some
properties, details Rufenacht, a vice chairman
of the Panhandle Producers & Royalty
Owners Association. A well on a lease in
Wheeler County, Tx., is still producing
at 101 years of age with an annual decline
rate of 1%-2%.
" We have other wells that are producing
the same right now as they were 10 years
ago, " he adds.
Questa was founded in 1985 by his
late father, Dale W. Rufenacht, who had
moved to Amarillo from Kansas with
Phillips Petroleum 10 years before. In a
50/50 partnership undertaken with a handshake,
Questa and Rob McGarraugh, now
president of Badger Operations in Perryton,
Tx., embarked on a strategy to acquire
distressed assets and other properties with
subsequent development backed by field
operation veterans.
s Oil & Gas
A decade ago, Questa and others influenced
the Texas Railroad Commission
to allow for denser drilling on one well
per 160 acres instead of one well per
section in the Panhandle, West Field,
which effectively expanded the drillable
acreage held by smaller operators, Rufenacht
recalls.
Talk of increasing power demand from
things such as artificial intelligence data
centers as well as expanding LNG exporting
capacity gives area producers reasons to
be optimistic about the potential for stable
gas prices in the long run, he says.
" I do not think you can be in the
natural gas business and be impatient, "
Rufenacht remarks. " We would be gone
by now if we were not patient. "
Applying Lessons Learned
To help make the most of new vertical
wells, H&L Exploration LLC is taking
lessons from its previous horizontal
drilling experience, says company President
Gib Brown.
Beginning in 2008, the company focused
on drilling horizontal Cleveland Sands
wells, ultimately completing 35 with sliding
sleeves, the prevailing technique in the
72 THE AMERICAN OIL & GAS REPORTER
T x Onsho dti
Don Hart, Editor
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American Oil and Gas Reporter - October 2024

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